Liu Longtao: Foreign banks will borrow net silver to compete for China market

According to China's commitment to the WTO, starting from December 11, 2006, renminbi business began to open to foreign banks fully. With Citigroup, HSBC and Standard Chartered as the representative of the famous foreign banks have begun to act, in order to conduct the final preparations for the renminbi business, a Chinese-foreign bank of the market scramble has begun. Compared with Chinese commercial banks, the biggest disadvantage of foreign banks lies in the small number of business outlets and lack of localization advantages. Facing the big four state-owned commercial banks to rely on national credit and brand influence to establish the oligopoly position and the small and medium-sized joint-stock commercial banks represented by China Merchants Bank and Minsheng Bank, the foreign banks will face unprecedented challenge and pressure to enter the Chinese market.

In the face of the above competition and challenges, internet banking will become a powerful weapon for foreign banks to compete for the Chinese market. Foreign bank's online bank has developed more mature abroad, has rich many years of practical experience to carry out online business, they not only advanced technology mature, but also the management level and the Prestige is high, the service scope is wide, provides the financial product many, the personalized service ability is very strong.

Online banking and traditional banks in many aspects are significantly different, through the Internet banking to provide financial services, can obtain more than through the traditional banks to provide financial services competitive advantage, which is the current Chinese foreign banks to vigorously develop online banking is the main reason. The competitive advantage of online banking is mainly embodied in the following aspects:

Low cost Competitive advantage

Online banking enhances the efficiency of financial services transactions, not only effectively reducing the cost of banking management and service delivery, but also greatly saving the customer transaction costs, so that customers can save the time to return to the bank or waiting in line, but also improve the customers enjoy the security of various types of financial services. In the case of the U.S. Department of Commerce, the unit cost of doing business through online banking channels is the lowest in all distribution channels, only for 0.01$, while the unit cost of doing business through the establishment of an operating agency is as high as 1.07$.

Differentiated Competitive Advantage

Online banking can not only break the geographical and time constraints, provide personalized financial services products, and improve the quality of service, but also in the case of almost no increase in operating costs, to achieve a one-to-one service to customers, thus creating differentiated services. As online banking can provide customers with independent operation of personalized interactive services, online banking will be the bank and customers pull tighter, product services more differentiated, business for each customer more targeted, thereby strengthening the customer's identity. To provide differentiated and personalized service is the inevitable trend of future banking development.

The competitive advantage of target agglomeration

Online banks can build up the profit core of foreign banks by using low cost to form an absolute competitive advantage in a market segment. If foreign banks can use online banking to develop various kinds of online banking business, such as personalized personal finance business, integrated online business and various financial information service, personal investment Advisory service, etc., it is very possible to form the competitive advantage of the target cluster. It will be a very effective marketing strategy for foreign banks to attract our high quality customers and open up RMB business market.

The competitive advantage of scale economy

With the rapid development of e-commerce and network economy in China, internet banking penetration in China will be more and more high, more netizens will use online banking to transact financial business. Online banking, which breaks the geographical limit of traditional bank expansion, can provide financial services on a global scale. In order to adapt to the trend of financial globalization and to improve its core competitiveness, the online banks of foreign banks should build flexible organization structure and mode of operation through active strategic alliances and cooperation, and the future "financial department stores" will have greater economies of scale and wider economic effects than traditional banks.

Eric Market Consulting analysis that, with China's accession to the WTO commitments, the banking industry barriers have disappeared, foreign banks will seize this rare opportunity to actively promote the Chinese market, high-quality customers, high value-added business and bank talent snatch, online banking not only reduces operating costs, Improve the quality of service and capacity, but also because of its ability to weaken China's state-owned banks ' network advantage will become foreign foreign banks to compete for the Chinese market the preferred means.